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The fruits of the flexible supply chain

by Davin Wilfrid

April 14, 2011

by Davin Wilfrid, insiderRESEARCH

Consider the apple. Its journey from a seed to a sapling, then to a fruit-bearing tree is only the beginning of its journey. It is then picked, gathered, cleaned, warehoused, and delivered by air, rail, or truck to a retail outlet where it finally lands in the hands of the consumer. And that's only one way of doing it. Other apples may be processed into pie filling or dehydrated and flaked into breakfast cereal.

The complexity of bringing products from idea to delivery requires modern companies to adapt to change quickly. Delivery of your apple can be impacted by everything from an early frost to a railway disaster.

At the SCM general assembly at this week's SCM 2011 event in Paris, Richard Howells and Stephan Kreipl of SAP focused on the volatility that drives the modern supply chain in 2011. Global economic indicators show improvements since the global economic meltdown of 2008, yet are vulnerable to any number of external issues. For example, consumer confidence in Europe is up over 2010, but the tsunami in Japan and unrest in the Middle East caused declines in those indexes since early March.

SAP says companies
need to do three things to ensure their supply chains can meet the challenges ahead: decide better, collaborate better, and operate better. To accomplish these things, SAP is focused on a three-pronged approach to improving its supply chain software:

1. Becoming best-in-class at every level of supply chain, not only in ERP integration but down to smaller individual areas of supply chain.

2. Offering the best integrated solutions. The value of SAP's supply chain software is very much pegged to its align multiple business processes across an entire landscape.

3. Increasing and improving industry-specific solutions. SAP offers 25 industry-specific solutions at the moment, but plans to improve the viability of those solutions and increase its reach steadily.

One example of this effort is version 8.0 of SAP's Transportation Management solution. Howells pitched version 8.0 as a collaborative effort between SAP and its customers.

“We did a lot things diff in 8.0 release,” says Howells. “More so than ever, we used our customer influence group to gather requirements. They were involved in the whole process -- even in QA and testing. Some are now in ramp-up.”

SAP TM 8.0 includes greater flexibility and process integration than prior versions, according to Howells, plus improved mobile and web collaboration. The solution also includes embedded analytics to help planners and supply chain executives make decisions quickly to adapt to potential disruptions in the supply chain.